iGaming Daily

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Hello and welcome to the latest episode of iGaming Daily, supported by Optimove. Today we have a special focus on EveryMatrix, who early this morning released their third quarter financial report. Third quarter, which is a period that's witnessed the firm experience unprecedented growth and expanding its footprint globally. And joining me to discuss this is none other than EveryMatrix's CEO, Ebbe Groes. Welcome to the podcast, Ebbe, how are you doing today?

You already told me you're in Malta, so I'm pretty jealous already. Yes, that's a good thing for me and sad for you. I'm very happy to be here. It's especially in November, it's really nice to get here. It is nice. is a fairly pleasant weather and with the luck I'll manage to dip my feet and entire body into the Mediterranean before the days over. yeah, looking forward to that. You've just made me even more envious of you. And for the viewers out there, if you are watching,

If you can see the video for those listening to audio, you are missing out because Ebbe has the coolest t-shirt I've ever seen. And it proves he is ready for that Mediterranean, that Mediterranean day and weather. I wish I could say the same about the background, which is somewhat boring, but I drew the sheets to not disturb you too much with the bright sunny beaches of Malta. You've just done it so I don't get too jealous. So I appreciate that. Thank you very much.

Like I said, we've got a lot to dissect today, but before we jump into the conversation, now is kind of an appropriate time to mention again, the main support of the iGaming Daily Podcast and that is Optimove, the number one CRM marketing solution for the iGaming space. Again, for viewers, as a special offer Optimove are offering new clients a free first month when they buy Optimove. For more information and to claim the free month, go to optimove.com forward slash SBC. As per usual, we'll leave the links in the description below. Now.

It's been, it's been a brilliant third quarter for every matrix. And actually you can probably say it's been a brilliant 20, 24. You've done a lot. You've had some big acquisitions, FSB technology and recently as well last month it was Phantasmal games. We're going to jump into all this, but let's just kind of talk about the records in revenue and growth for this year, which was incredible. Can you just highlight what they were and what kind of strategic choices fueled?

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this rapid growth and how you kind of foresee maintaining or even accelerating this trajectory in the coming years? Yeah. yeah, on the numbers themselves, you know, you can find all the details on our website, etc. That's a nice big presentation. the key is that we're growing at a clip above 50 % per year. And we do this for enough quarters and then very good things happen.

This is our revenue is growing by this and although we do a fairly good job of increasing our costs, we've hired a of people as well, then we cannot keep up. And this means that our profits also increase and quite lot as well. So just to put things in perspective, this quarter we had the same profits this quarter as we had for the entire year 2022. So I was very happy.

We ended in 2002 with a profit of 20 million euros. That's what we recorded in Q3 here. We have 90 million for the last four quarters if we add them together. So that's sort of the raw rate we had at the moment. So just dramatically different from what we were even a couple of years ago. And when the company, you've been in the company, founded a company, been running this for 15 plus years, then...

You can still be a bit boggled, mind boggled by seeing such big changes in such a short period. We're trying to keep up, but yeah, it's very exciting. It's also very fast. It must be a proud moment. like, we're to come on to the recent acquisitions. I've already mentioned, you know, FSB technology. me, Phantasma Games, I remember when I was on slot beats and I first covered them and they were kind of, they were a new entity to me as well.

the games that they produce were fantastic. So kind of to see them grow under your banner as well, it's going to be very interesting and it's a great acquisition for you. But how have these acquisitions kind of transformed every matrix is a market position, especially in regions like North America, where it's slowing down a bit sometimes, you know, the more consolidated in these days, but it's still a huge market to contend with. Yeah. The first thing to say is so far,

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I mean, the numbers we're showing today and the year so far is really just organic growth. And you asked me before what is behind this and I'll do to state it. The key, the secret sauce for your matrix is the retention of our clients. This one thing we're just really very good at. And so when you sign clients in 2016 and 2019 and 2022 and you still have that cohort after cohort of clients,

This is really the key thing. Each of them, most of them, drawing really nicely and then bolding on. So the potential of the client, this is our number one strength. And I'm sure we could do better in many other areas, but this one thing we do really well. So this is what brings around these good numbers. For their positions, well, that will be a year from now, James, until we can really judge how much of effect would have. I can tell you what I hope.

It will deliver. I am very much excited about both of the speed technologies and the fantastic positions. I very much believe that will us in America with the games in UK, Ireland and in Africa with the FSP stuff. I think it will work very well, but all of this is very, very recent. We've been the owners of FSP technologies for three months of Fantasma for three weeks. So yeah, a lot.

of work with integration consolidation, integrating teams, clients, migrations, a lot of work ahead. But we're on to this with a good start. And if we keep this momentum, then I think in 12 months from now, then we will see really good results from both of these two acquisitions. Absolutely. And just kind of backscaling a little bit of too, previously you mentioned

much you've grown in terms of personnel and that's 31 % increase in headcount. It's impressive. But I think one of the things a lot of companies kind of struggle with is when you face that scalability issue, as how, you know, when you grow quite quickly, are there any areas within every matrix is kind of infrastructure or operations where rapid growth has kind of maybe exposed a few weaknesses? And kind of if so, how do you kind of address them? think one of the secrets

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So many secrets today. One of the secrets here to why we are able to do this relatively well and with relatively little of these growing pains is because of the way we organize the company. This is something we did five, six years ago and we are really reaping the benefits of it now. So back then what we did was we structured the company in various units and made sure that each unit was fairly autonomous. We have a sports division.

Casino division, we have a games division now with Fantasma included and so on. Each of these units has their own management. Each of these units is in itself a little company within Erematrix. Each of these units we report to their management, their let's say local management, their own P &L. Frederick Johansson, the CEO of Fantasma, is now heading our content division, our slot matrix. He has his own P &L, he has his own budget.

He operates in essence as much as we can as an independent company in the way he did before we acquired him. He is not a company of 1,200 as we are in total. He's a company of less than 100. This gives him the agility. We allow him the decision making to a very large extent of defining his products, hiring the people, doing his marketing, even as his own sales, as his own support.

All these things are localized. We have four different 247 support teams. Most companies do not have this. It's an extra cost to have this, but it gives you this autonomy. Sports division, own support team. Casino division, own support team. Payments, own support team. Incidents, tech support, the same. This really gives the freedom, but also the responsibility for the management of each of these business units. And that was me.

more time to be doing strategic things, such as these two positions, and not be too much into each of these areas. I was part of a start-up company, so I know many of these things very well. It allows me to sort of step in and out where I think is needed. And where things really work well, then for me it's hands off. You guys run it, you are performing, it's good, and...

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As you see in our reports, most of the units here perform really well, which means more time for me to do other things, focus on drawing, and also to do an extra effort where things may be working less well. Another thing that was in your Q3 was new market entries. And I kind of want to focus on one specifically, and that's Peru, because it's a unique market to me. I don't know much, and we talk about Brazil and the US quite a lot on this podcast.

think Peru will be an interesting conversation. Can you just tell me kind of what unique market demands you kind of encounter in Peru and also what challenges every matrix faced in kind of winning over local operators or customers who are loyal to existing suppliers who were already in the market? Yeah. First of all, Peru is really quite an interesting market. It's actually quite larger than you might think. It's 35 million people.

It's large country. People talk about Brazil. Yes, Brazilian market though has not regulated. People who happily target Brazil today are doing this with licenses everywhere else, the Brazil. This is a great market today, Brazil. Peru is not. It's fully regulated and been up and running for 18 months by now. We were happy to get

a fairly small operator on board. They chose us and by now we are then in the market. How we got into this, well, of course we did. We did do a concerted effort to get in and establish the first footnote. Another thing I would say is, look at market like this and I think it's not atypical. Then...

The Peruvian market actually is very much a retail market today. So online regulation is very new. A small part of the gambling that goes on in Peru is iGaming. Most is retail. There are thousands of betting shops across Peru. They are running typically on local software. And what is the case there, as it many other countries, is that retail

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So very often it to be localized. And then the localized providers of this tend to struggle a bit when it comes to delivering a competitive product in that market. And that's also what's happened to Peru. And it's also quite significant that the top-upers Peru actually are not local Peruvian companies at all. It's a company as you recognize, it's BetSan, it's Betano.

They are the top dogs right now in Peru. a task for companies such as the Maxtrax is of course to empower also local operators and give them a shot. Their local software will typically not be good enough. With all respect, it takes a lot of investments to deliver something that is as good as Betano, as good as Betano. These are top, top.

Quality companies, they know everything about how to do this online and the products they bring to the market are excellent. So this is sort of the change we have. We have to both, of course, adapt to the local market, local compliance rules, payment methods, whatnot, games content.

And at the same time, if to do something that at the same time is as good as the tier one B2C operators on the planet. This is a challenge and this is also what in this one Peruvian case sort of exemplifies what is a chance for any company of my type. It is not only to be as good as what you would say is my competitors in the B2B space. Of course, it's important and I compare myself to other B2B providers.

But I should also compare myself to the B2C because those are the ones that my clients are competing with. And it's a benchmark I must measure myself against, not just to say, my sports book should be comparable to Canby or whatnot. It goes way beyond this. We've got about five minutes left and I've got about a thousand questions left to ask. But what we're going to do, we're going to do a quick scatter approach and I kind of want to

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look a bit more into kind of the casino sector, look at your loyalty engine, slot matrixes, your aggregator performance, and maybe if we have time delve into kind of the affiliate sector of your company. So I think let's start off with the loyalty engine. It is kind of, offers a unique approach to players. Can you just walk us through its development process and how does it kind of reflect kind of the larger trends in gamification and player engagement within iGaming? Yeah, first of all, of course,

That's a product I'm happy for. It's a product that I'm sure will be well received. It's also something where we have absolutely no claims of being like first moves or anything of the sort. We have had clients doing communication for years. They've done this in-house using APIs that we give them and they can build, they build their own systems. They have clients that use third-party products of various types. What we have seen is...

that we believe at the present stage and with the number and size of our clients. It made sense that we built a product of our own and provide to our clients. We're now live, as of today actually, with our first client. And then from then on, there wasn't very much about the iteration. What Logic does is similar to what you would expect players are in point. The key thing is doing this from a product side of view.

to do it with great flexibility. So I can have two operators that have very different gamification plans and ideas, and they can both use the same. So you're able to award these points on things that you believe matter to you in terms of retaining your clients. Maybe it's very important for you to promote certain payment methods that are saving you costs, and you can get maybe points for using the cheap method rather than the expensive method.

Maybe some game vendors you want to promote, maybe you have better rev shares, or maybe they are your games or your in-house games and you want to build these so you get extra points for these. the key thing that I like about our system is that it's directly linked to all the information that we have already inside of our registers as a training provider. You can take advantage of the fact that we have all these different gaming vendors, that we have all these different payment vendors, that we have all this

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depth of information that you can use to condition the way you structure your loyalty program, the points you give. And of course, then the points convert into you really get levels and you can exchange points for prizes and phones and whatnot. All of this is somewhat standard. The key thing for us is doing something that's flexible enough to help an operator in Peru, but also one in Greece.

This is what I think we've achieved, yeah, the proof is in the pudding. Now we're going live. But yeah, it's very exciting project. And one, think that more than sales is really something that aims to improve the workings, the operations of our existing client base. Perfect. Just want to say, Ebe, secret sauce and proof in the pudding. You're right today with these sayings. I'm loving it. But I want to kind of touch on slot matrix.

your aggregation product for those who don't know, but know, slot matrix is quite well known. This quarter alone, you released almost a thousand games, thousand new games. And that's impressive. but one of the questions I want to kind of ask you with this is, and it kind of goes back to the, to the old argument of quantity over quality approach, because there's so many games in in such a close quarter, space of time in the quarter, how does every matrix kind of balance that sheer volume of games?

with the need to kind of maintain high quality, engaging content. The key here is, of course, that you have the breadth of games at your disposal, but certainly not that you should say, I'm trying to, I'm hoping that players will use all of these games that we have now. Yes, more games than anyone else. But the key thing here is not to have a lot of games. key thing is the right games. It will be different games that appeals to a player in New Jersey compared to Lima, compared to Athens.

These are different audiences with different preferences. So by having a lot of games, what you do is you allow your operator to benefit by choosing the games that fits the audience. And the key in this, of course, to give players or give operators insight into how what games work well in what markets. Something we can do the larger we become.

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It is a dual recommendation system. So we have a very flexible system today for designing your casino lobby and turning this into more AI driven. This is really where it will benefit more from having so many games. The more you have, the better you're able to predict and to recommend what is going to be written for the player.

Okay, perfect. There's two more questions and then I'll let you go off into the sum, the multi-sum. I kind of want to touch on your affiliate division. So you're a beta in, sorry, decrease in Q3 and due to kind of ongoing product and commercial investments that we've kind of talked about, but how will every matrix manage the risk of prolonged financial strain on this division and what is the timeline for expected profitability? Yeah, so the first thing of course is

Then we are in this nice position that yes, we are right now losing money in the field division. However, we are losing a fraction of our profits. We had a loss of, I don't know, 200,000, 300,000 on the field division. We had a profit of 23 million.

It is not something that keeps us sleepless that much, of course, is sure. That doesn't mean we don't have expectations and demands. I will revert to this tale about how we structured as a company. We have people whose only job it is to make this work.

My job is to make sure I have the right people and that overall the structure is the right one. But their job is to deliver a fair product that is successful and makes money and has growth as we do in most other areas of our business today.

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Do I feel impatience? Not so much. And it's a little bit different from case to case, but the reason I'm right now feeling fairly bullish and not very time pressured is that we just recently acquired a company that we merged into this existing affiliate business. Our existing affiliate business, Bottom Exchange, was doing really well. And sometimes when you then inject a new product in your organization, you change things around.

In this case, sort of doubling that organization. You have these growing pains, even if they're at a smaller scale. We had to do some reorganization with some of this three months ago. this moment, I'm confident it will work. But of course, we're monitoring it. We're publishing the numbers. We are keeping ourselves, holding ourselves and these guys in our field of vision accountable for them delivering. And yeah.

We have the money to invest, but we also have to feel confident that this investment will pay off. This is a nice position to be in. And since we are right now confident, then we don't have like a timeline for this level of patience at the moment. just feel really good about it.

I can see that there are some things we're struggling with, but we are also more people, are also 50 % up compared to a couple of years ago in terms of revenues. So there things we should improve and we are trying to do that. Perfect. And to round us off, I bet we'll end on a positive because it's been a positive Q3 for every matrix and given your exponential kind of rise in GGR and your net revenue, what are every matrix's

top goals over the next five years and how will success be measured beyond just financial metrics for yourself? From a personal perspective, what is success for you? Yeah, for me is that our clients are happy. This is pretty easy. It's very demotivating to run a business, to create a business, to product business.

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And then you feel that you're letting down the people that are supposed to pay the bills and like what you're doing. It's a foundation for everything is this. And I think you can feel it all through a company if you have unhappiness on the client side. And then you have the other way then.

It gives you just energy to move forward and do more. In terms of where we want to go in the next five years, it's a long time in a world that changes so fast, but really we want to diversify in terms of geography. Yes, we have this Peruvian deal we discussed. This is also our first deal in Latin America. We have one more in the future, but...

We are not really into this market. Before we acquired FSB, we were not really into the UK market or the African market. We have made a very successful company but limited to a small part of the world.

South Eastern Europe. That's it. It's incredible that we do so well with such a small part of the world as our playground. And so this is really the criteria for me for going forward. I would like to see us taking a part of the market in Africa, Asia as it starts regulating. Of course, North America, we're busy already. So I want to see this happening and

I measure this year of our revenue that comes from Europe versus the rest of the world. And now when we are 90 % Europe, then that is a key KPI for me to look at. And when I have a more balanced revenue structure, then I also feel I'm on a more solid footing in terms of capturing opportunities going forward and keeping our company sound and stable going forward. Perfect.

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That's all we've got time for. Thank you so much for joining me today. Great conversation and it's going to be an exciting time to see how far every makeshift go in the future just off the back of your 2024 performance alone. But I'll let you go because I'm pretty sure you told me before this call that you're to do a cannonball into the pool. So, and you promised I'd use your take a video and put it on social media for us and tag us in. So, Evie, thank you for joining us and enjoy the rest of Malta and Sigma while you're there and have a great party later.

Thank very much, a pleasure to talk to you. Bye.